If you are a federal grantee and you have subawardees, you may have questions about how to select, manage, and monitor subawardees.
If you are a subawardee of a federal grant, you may want to know more about your responsibilities.
What is a subaward?
According to Uniform Guidance, a subaward is “an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.”
Because a subawardee will “carry out a part of a Federal award” with federal funds, the federal requirements flow down to the subawardee. However, in some case, subawardees are not aware they received federal grant funding.
This disconnect occurs because in some instances primary recipients of federal grants are providing subawards using documents that lack the details and instructions that are required to be in a subaward.
Here are a few examples of inadequate subaward agreements:
- One-page subaward notification letter without the required details provided by a local government agency to a subawardee.
- Standard contract without the required subaward details provided by a state government agency to a subawardee.
- Subaward notification letter without the required details provided by a city government that included attached U.S. Department of Treasury guidelines the city government must adhere to with no mention in the agreement about how Treasury’s guidelines impact the subawardee.
- One subaward agreement that integrated the scope of work and deliverables for 3-4 subawardees and none of the required subaward information.
Unfortunately, these situations leave subawardees confused about their roles and their responsibilities and completely unaware there are federal requirements they should adhere to.
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How to simplify the process
Once it is confirmed that subawards are in the approved award budget, the next step will be to determine how potential subawardees will be identified if they were not already outlined in the approved award budget. A process to identify, vet, and select potential subawardees will need to be developed and implemented.
You must also determine on a case-by-case basis what risks, if any, exist in awarding a federal subaward to your selections.
One of the most important steps in the process is to prepare a legal agreement that includes the required details and other relevant instructions. After the agreement is fully executed, then a process to monitor subawardees needs to be developed, documented and implemented.